It is not only in Britain that Brexit has focused the mind. On the continent and farther afield, questions are going unanswered in classrooms and cafes, among people of all ages, ethnicities and professions. Nowhere are answers more keenly sought than in the boardroom.
The UK has always been respected by international enterprise for its dependability, business prowess and standards of education. Oxford and LBS are still magnets for those who know good jobs await upon graduation, especially in global professional and financial services. But accessibility and openness have always been fundamental British attributes, and a self imposed departure from the international business scene begs more questions than it answers.
With 24,000 associates in 80 countries, my work crosses continents. In conversations with international clients, I detect a realism that has grudgingly moved through the five stages of grief - denial, anger, bargaining, depression and acceptance - to a much harder outlook.
Brain Drain, not Brain Gain
That’s a dangerous place for an economy to find itself in a global talent market. Countries that place restrictions on the flows of international talent are at the same risk as those suffering from involuntary brain drains. Brexit’s restrictions on immigration are unclear, but the gradual exodus of intellectual and financial capital to Singapore, Dublin, Paris, Frankfurt and Eastern Europe is irrefutable.
When inward investment goes elsewhere, when US groups move their European HQs from London to Europe, it isn’t just individual departments that offshore, it’s the legal contracts that move to similar but more dependable centres such as Singapore or the back offices that enrich Poland. It’s the ideas that go with them; the original thinking and future innovations that hatch elsewhere, in new clusters, with new people, connected with other academic institutions. Furthermore, it is the roles that leave Britain, not the people, who are left behind and are quickly replaced in emerging countries by enthusiastic, educated minds.
For the UK to succeed economically, it has to compete academically. The global knowledge economy depends on the research institutions that underpin it.
In undergraduate and graduate education, great strides in the quality of teaching and resultant employability of UK graduates have frequently been linked to EU funding and international academic cooperation across Europe. UK universities’ high rankings have largely depended on European partnerships and collaborations, together with the EU’s universities budget of €90bn.
The third, postgraduate sector, produces the greatest technological breakthroughs and depends most on international connectivity and funding to do so. PhDs are competitive weapons, and especially so in fast growing emerging centres, all of which have expanded their higher education and training to attract investment. Countries like Mexico, Turkey and Indonesia are catching up with the old economy fast, as the global centre of gravity moves south and east. The OECD notes that India produced 24,300 PhDs last year compared with the UK’s 25,020. France’s 13,729 PhDs just pipped South Korea’s 12,931. This is where Brexit Britain will have to work hardest in order to stay in the international game.
Britain will have to reinvent itself
Brexit also risks accentuating some of the structural weaknesses inherent in the British educational system. Emerging talent is the product of a booming middle class, not of mature or stagnant economies. But over the past 30 years Britain has suffered from a coexistence of expanding pockets of poverty with isolated spots of exceptional wealth. Its challenge today is to ensure an equally distributed level of prosperity and therefore educational opportunity.
Access to superior teaching at an ethical price, initiatives that regenerate impoverished areas, ambitious talent development policies and structured tax incentives will all be key in levelling out educational disparity and cultivating talent.
Survival will depend on the UK’s ability to activate and mobilise its creative class, for which education is both a magnet and a generator. Richard Florida, an authority in social and economic theory, stresses the importance of those whose profession is creative, such as architects, actors and designers, and those who perform their jobs better when they think creatively (consultants, teachers and chefs). Attracting them and retaining them is key to a country’s prosperity and long-term value creation.
Brexit’s effect on the professional services sector is an interesting case in point. To future proof our clients we have to think just as creatively, to ensure we stay ahead. Coinciding with the Brexit revolution come changes in the importance of big data, automation and AI, which will move the talent war away from junior roles and focus on strategic thought. Organisations such as ours will take a new look at the talent on offer as we seek out the most aware, connected and qualified minds. As part of our evolution, we are just as likely as any other dynamic, forward looking global enterprise to look away from Britain in our search to find them.
Britain’s got talent, no doubt about it. But Brexit risks more than a reputational challenge. Lost and transferred investment go hand in hand with reduced mobility and disengagement. Innovation depends on a global, not a national supply of skills. Brexit will force Britain to work much harder to educate and globalise its talent than it would have, had the UK simply opted to stay in the EU.
Laurent Choain is global chief people officer at professional services firm Mazars.
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